Podcast Summary
Operation Choke Point and crypto industry disruption: Operation Choke Point could negatively make crypto industry bankless, Ryan's StarkNet conference experiences, and upcoming Bankless podcasts with Eric Howell, Aliza, and Annie Jacobson.
Operation Choke Point poses a significant regulatory threat to the crypto industry, potentially making it bankless in a negative way. Ryan and David, hosts of the Bankless weekly roll up, discussed this and other news in crypto while enjoying their coffee. Ryan shared his recent experiences from the StarkNet world conference, where he interviewed various founders and builders. He mentioned that he brings a podcast studio with him to conferences to conduct long interviews, avoiding small talk and pitches. Despite being characterized as an introvert, Ryan has discovered that coming into crypto has made him more extroverted. Looking ahead, Bankless has an exciting lineup of podcasts featuring big names like Eric Howell on crypto ethics, Aliza on AI, and Annie Jacobson on government surveillance and privacy in crypto. While the Annie Jacobson content may not be directly about crypto, it is expected to provide valuable insights into the broader implications of the technology.
Could there be a CIA plant in the crypto world?: Stay aware of potential intelligence agency presence in the crypto scene and maintain a healthy level of skepticism.
Throughout history, intelligence agencies like the CIA have infiltrated countercultural dissident movements. Given this pattern, it's a valid question to consider if someone in the crypto world could be a plant. Annie Jacobson, a journalist, raised this concern during a podcast episode. She emphasized that she doesn't have specific knowledge about the CIA's involvement in crypto but encourages listeners to connect the dots. If you're deeply involved in the crypto scene, including social networks, VC networks, and media networks, there's a likelihood that someone with ties to intelligence agencies could be present. It's essential to be aware of this possibility and maintain a healthy level of skepticism. Furthermore, the crypto space is continuously evolving, with new tools and platforms emerging regularly. MetaMask Learn is one such tool that can help users learn about crypto and decentralized finance in an interactive and engaging way. This courseware covers essential concepts like digital identity, self custody, NFTs, and decentralized finance. In terms of market updates, Bitcoin and Ethereum have experienced a down week, with Bitcoin currently trading at around $22,500 and Ethereum at $1,620. Despite the market downturn, there have been several significant updates and shipments from various teams in the crypto space. Overall, it's crucial to stay informed and adapt to the ever-changing landscape of the crypto industry.
Ethereum Price Indicators Signal Upcoming Increase: ETH's deflation post-merge hits all-time lows, burn rate increases significantly, and overall market cap remains optimistic for $10,000 price
Despite the current market downturn and ongoing banking FUD, there are bullish indicators in the crypto market, specifically in the Ethereum price chart, which could signal an upcoming price increase. Ethereum's deflation post-merge has reached all-time lows, and the ETH burn rate continues to increase significantly. The 24-hour record for ETH burn was set during crypto's worst crisis, but the current burn rate is still lower than that. The Ethereum market cap is slightly down on the week, but overall, the long-term outlook remains optimistic, with many believing Ethereum will reach $10,000. Traders can use tools like Kraken's modular UI to monitor prices and charts for multiple trading pairs in real-time.
Ethereum and Bitcoin's high gas fees sign of bull market: Ethereum merge, increased demand, and layer 2 solutions drive up Ethereum gas fees, while Bitcoin's block space demand hits new highs due to Ordinals and increased adoption.
The high gas fees on Ethereum, while once seen as a bearish indicator, may now be a sign of a bull market due to the Ethereum merge, increased demand for block space, and the availability of affordable gas fees on layer 2 solutions. Additionally, Bitcoin's block space demand has also reached new all-time highs, indicating increased adoption and sustainability of the network. The introduction of Ordinals, which allows for the minting of NFTs on Bitcoin using the smallest denomination of Bitcoin, has contributed to this exponential growth in block space demand. Overall, the high demand for block space on both Ethereum and Bitcoin is a positive sign for the long-term growth and sustainability of these networks.
Bitcoin: Segwit, Taproot, and Controversy: The Bitcoin community debates the necessity of Segwit and Taproot, while predictions for its price range from bullish $1,480,000 to bearish $258,000 per Bitcoin by 2030. AI tokens gain interest but lack meaningful integration with crypto.
The recent controversy in the Bitcoin community revolves around the need for both Segwit and Taproot, which are relatively new developments, and the perceived manipulation of the code to make it happen. This has led to debates about the true value and demand for Bitcoin, with some predicting bullish prices reaching up to $1,480,000 per Bitcoin by 2030, while others believe the bear case of $258,000 per Bitcoin is more likely due to the high issuance rate and the need for miners to sell new coins. Additionally, there is growing interest in AI tokens, which some see as a narrative or meme trade due to the lack of meaningful integration between AI and crypto. It's important to approach these markets with a clear understanding of the underlying technology and its real-world applications.
NFT Lending Platforms Seeing Growth with Record-Breaking Loans: NFT holders can now use their assets as collateral to borrow ETH, generating wealth effect, transcending borders and offering an alternative to traditional legal systems.
NFT lending platforms like NFT Fi are seeing significant growth, with record-breaking numbers of loans made and large volumes of ETH borrowed using NFTs as collateral. This trend, which was first discussed a few years ago, is now a reality and demonstrates the resilience of NFTs even during the current bear market. NFT holders can now tap into the capital locked up in their assets without selling them, generating a wealth effect. This innovation, made possible through smart contracts and Ethereum's stronger settlement assurances, transcends national borders and offers an alternative to traditional legal systems. This is a significant development in the NFT space and underscores the potential for NFTs to unlock new opportunities for users.
US crackdown on crypto industry targets banking connectivity: The US government is intensely targeting the crypto industry, aiming to cut off its access to the banking system through various regulatory measures and influential actions.
The US government is currently engaging in a coordinated crackdown on the crypto industry, aiming to marginalize it and cut off its connectivity to the banking system. This effort, reminiscent of the historical Operation Choke Point from the Obama era, is targeting crypto businesses and institutions, with various regulatory bodies and influential members of Congress involved. The administration's actions include discouraging banks from dealing with crypto firms, shutting down crypto-related accounts, and broadening their regulatory authority. This widespread and intense campaign is effectively choking off the crypto industry's access to the banking sector. Some notable events include Signature Bank's decision to exit the crypto business, the Fed's discouragement of banks from holding crypto assets, and the denial of crypto bank custodians' applications to become members of the federal reserve system. The ultimate goal seems to be to render the crypto industry completely unbanked, which could significantly impact the stability and functionality of the crypto market.
Regulatory crackdown on banks engaging with crypto: Regulators are limiting banks' ability to work with crypto, restricting financial freedom and going against American values.
Regulators have been cracking down on banks engaging with crypto, issuing threats and discrimination against the industry due to a lack of comprehensive regulatory authority. This includes activities like taking deposits from crypto clients, issuing stable coins, engaging in crypto custody, or holding crypto as principal. Senator Bill Hagerty has spoken out against this use of banking regulators to advance political agendas. Jake Stravinsky, a trusted lawyer, agrees that this is a concerning trend, as it restricts the ability to freely transact with money and goes against American values. The closure of services like LocalBitcoins, which facilitated peer-to-peer Bitcoin transactions, is another example of this regulatory overreach. The SEC's potential move against crypto staking for retail customers further reinforces this narrative. The overall message is that the government should separate money and finance from political powers, as James Madison suggested long ago. This trend, which some see as an attempt to control industries and restrict financial freedom, is a cause for concern and should be addressed.
SEC Regulations and their Impact on Retail Investors: Ongoing SEC rumors could limit retail investors' access to staking and NFTs, potentially infringing on financial liberties, and the US's stance on crypto could hinder its citizens' access to this emerging technology.
There are ongoing rumors about potential regulatory actions by the SEC against staking and NFTs in the US, which could disproportionately affect retail investors. This could be a breach of financial liberties if individuals are forced to use institutional channels to stake or trade in crypto. The US's stance on crypto could potentially hinder its citizens' access to this emerging technology. Meanwhile, there's also a restructuring plan between Genesis and Digital Currency Group, with Genesis creditors expected to recover around 80% of their funds. The recovery is being facilitated by Genesis' own funds, sales of Genesis Global Trading, exchanging notes for stock and loans, and selling trust funds on the open market at a discount.
Genesis and Gemini Reach Resolution on Lending Platform Issues: Genesis depositors may receive approximately 80% of their funds back, following a resolution between Genesis and Gemini. The crypto industry faces ongoing regulatory challenges, but the Winklevoss Twins and Barry Silbert's handling of the situation is praised.
Genesis and Gemini, two major players in the crypto industry, have reached a resolution for the issues surrounding Genesis' lending platform, resulting in depositors potentially receiving approximately 80% of their funds back. This resolution comes after Genesis faced significant selling pressure and Gemini contributed $100 million to help customers get whole. This outcome, while not ideal, is seen as a reasonable one given the risks involved and the culpability acknowledged by both parties. This resolution marks the end of a major chapter in the crypto industry's regulatory challenges, though regulatory blowback is still to be addressed. The Winklevoss Twins and Barry Silbert of Gemini are receiving praise for their handling of the situation. In other news, Arbitrum enables developers to Bring Your Own Chain (BYOC), Lido v2 is moving towards decentralization, and MakerDAO has released a financial performance report. Stay tuned for more updates on these topics and more. Sponsored content: Uniswap, the largest on-chain marketplace for self-custody digital assets, has added a fiat on-ramp, allowing users to go directly from fiat to tokens and NFTs. The wallet also supports Polygon, Arbitrum, and Optimism layer twos. Phantom, the number one wallet on Solana, is coming to Ethereum and Polygon, bringing its millions of users and beloved UX, as well as staking and NFT management features.
Arbitrum introduces new programming environment Stylus for multi-language smart contracts: Arbitrum's Stylus allows developers to build smart contracts using various languages like Rust, C, C++, Haskell, Python, increasing accessibility to a wider range of programming communities. StarkWare opensources Prover technology for transparency and trust, and MakerDAO releases financial report in traditional financial statement format.
Arbitrum, a layer 2 scaling solution on Ethereum, is introducing a new programming environment called Stylus, which allows developers to use various programming languages, including Rust, C, C++, Haskell, Python, and more, to build smart contracts on Arbitrum using WebAssembly. This expansion beyond Ethereum's native Solidity language is a significant development, as it opens up the platform to a wider range of developers and programming communities. Additionally, StarkWare, another Ethereum scaling solution, announced its plan to open-source its Prover technology, which is a critical step towards decentralizing layer 2 solutions. This move will allow individuals to review the code and detect bugs, increasing transparency and trust in these technologies. MakerDAO, a decentralized finance protocol, released a financial performance report on IPFS, showcasing its financial results in a format reminiscent of traditional financial statements. This report's on-chain data and organization resemble Excel sheets, making it accessible to traditional finance audiences. Overall, these developments demonstrate the continued growth and innovation in the Ethereum ecosystem, with a focus on expanding accessibility, decentralization, and transparency.
VC vs VC governance war in DeFi: The recent controversy in DeFi between 16z and Jump Crypto over governance power and use of a specific bridge for Uniswap's deployment on the BNB chain highlights the complexities and nuances of decentralized governance in crypto, with debates going beyond just token voting and involving security concerns and the role of large entities.
The recent controversy in DeFi involving 16z and Jump Crypto over the use of a specific bridge for Uniswap's deployment on the BNB chain has been labeled as a "VC versus VC governance war." This controversy stems from 16z using its governance power to veto the proposal for Uniswap to use the wormhole bridge, which is backed by Jump Crypto. Some in the community have criticized this move as an abuse of power and a cartel-like behavior. However, 16z has clarified that they only control a minority of the votes and delegated most of their governance power to outside groups. The debate goes beyond just token voting and decentralization, as some argue that the most decentralized part of Uniswap is its code. The security concerns surrounding cross-chain bridges and the role of large entities in DeFi governance are also important factors to consider. Ultimately, this controversy highlights the complexities and nuances of decentralized governance in the crypto space.
Decentralized finance's security advantage: Decentralized finance platforms like Uniswap offer enhanced security due to their decentralized nature, allowing for forks and alternative versions to prevent control by a single entity. However, users must remain cautious of scams and honeypots.
While there are risks involved in using decentralized finance (DeFi) platforms like Uniswap, the decentralized nature of these protocols provides a level of security that goes beyond what traditional financial institutions can offer. The ability to fork the code and create alternative versions ensures that Uniswap, or any similar platform, cannot be completely shut down or controlled by a single entity. Additionally, the NFT space continues to evolve with creators like People Pleaser pushing boundaries and experimenting with community-driven production studios. However, it's important to remain vigilant against scams and honeypots, as demonstrated by Coffeezilla's recent exposure of Dylan Danis promoting a fake NFT project. Transparency and disclosures are crucial in maintaining trust within the crypto community.
Demand for transparency in crypto industry: FTX debtors seek return of political donations, Super Bowl crypto ads fall through, authorities seek fugitives: FTX debtors demand political donations be returned, Super Bowl crypto ads didn't materialize, authorities actively pursuing crypto-related fugitives emphasize the need for transparency in crypto industry
Transparency and disclosure are becoming increasingly important norms in the crypto industry. This was highlighted in the case of FTX, where debtors are demanding the return of political donations made by the company. Politicians and entities who received such donations have been asked to return them by February 28th, or face legal action. The Super Bowl, meanwhile, did not ban crypto ads, but most deals fell through due to the financial instability in the industry. Elsewhere, authorities are actively seeking out fugitives like Do Kwon, who is wanted for arrest on charges related to crypto-related activities. Another figure, Kyle Davies, was identified through a Twitter subpoena after he continued to tweet despite being aware of the legal proceedings against him. These events underscore the need for accountability and transparency in the crypto space.
Innovations in crypto: Decentralization and tax treatment: Decentralization advances with Lido's new architecture and Infinity pools' no-counterparty risk. Tax treatment debated with Consensus' crop analogy and Kyle Davies' fundraising.
The crypto community is seeing significant developments in decentralization and tax treatment. Kyle Davies, despite facing charges, continues to raise funds for his new project. Meanwhile, Consensus is advocating for the taxation of staked crypto rewards to be treated more like growing crops, not taxable income until sale. In the world of DeFi, Lido is moving towards more decentralization with its new architecture, allowing anyone to become a validator. Aave's stablecoin is now on the Gourley testnet, and Element is pooling all liquidity together for any term length. Infinity pools, a new breakthrough in DeFi, offers any asset, unlimited leverage, no oracles, no liquidations, and no counterparty risk. Mean Finance, a DEX aggregator aggregator, is introducing a dollar cost averaging tool in DeFi. These developments highlight the continuous innovation and evolution in the crypto space.
Invest in crypto through DCA with Mean Finance on MetaMask: Mean Finance, a DeFi protocol, partners with MetaMask to enable dollar cost averaging for crypto investments. Mean Finance uses StarkWare's zk-rollups for scalability and offers officially licensed NFTs. Job opportunities in crypto industry are increasing, with companies like Uniswap Labs, Bankless, Consensus, Adidas, and Bullish hiring.
MetaMask users can invest in crypto through dollar cost averaging using Mean Finance's aggregator on the MetaMask platform. Mean Finance is a decentralized finance (DeFi) protocol that operates on multiple networks, including Polygon, and has partnered with the Premier League to create officially licensed NFTs for football fans. The tech behind Mean Finance is StarkWare's zk-rollups, which is a scalability solution that is gaining attention in the crypto space. Additionally, there are numerous job opportunities in the crypto industry, as evidenced by the increasing number of job listings on the Bankless jobs board. Some of the companies hiring include Uniswap Labs, Bankless, Consensus, Adidas, and Bullish. For those interested in exploring the crypto space further, Bankless Premium offers benefits such as ad-free content, a monthly token report, a discount to the permissionless conference, and access to the Bankless team in the inner circle Discord. Earnify is another tool that can help users claim unclaimed airdrops and manage their wallets. Overall, the crypto space is growing rapidly, and opportunities for investment and employment are abundant.
Zk-rollups: Leading the Way in Account Abstraction and Smart Contract Wallets: Zk-rollups, such as StarkNet, Zksync, and Scroll, offer account abstraction and enable smart contract wallets, unlike optimistic roll-ups. These features lead to more composable components and organically built metaverses.
Zk-rollups, specifically StarkNet, Zksync, and Scroll, are leading the innovation in various frontiers, such as account abstraction and smart contract wallets, and on-chain gaming. These areas are not enabled in optimistic roll-ups like Optimism and Arbitrum due to Ethereum's lack of account abstraction. Zk-rollups offer more compression and enable more logic to be on-chain, leading to more composable components and organically built metaverses. Additionally, smart contract wallets, like Argent and Bravo, are starting to emerge on zk-rollups. Account abstraction allows for more native implementation of smart contract wallets, unlike multisig wallets like Gnosis Safe, which are technically smart contract wallets but require more brute force implementation. Overall, zk-rollups offer unique advantages and opportunities, and it remains to be seen which ecosystems will find product-market fit and dominate in specific niches.
Account Abstraction: The Future of Crypto Wallets: Account Abstraction is a technical standard that enables the creation of smart contract wallets on blockchains, making crypto transactions more user-friendly and seamless, but it's not yet available on Ethereum mainnet and requires an EIP to be implemented first.
Account abstraction is a key development for the crypto space that will enable the creation of smart contract wallets on blockchains, making crypto transactions smoother and more user-friendly, while Ethereum currently relies on externally owned accounts which are less advanced. Account abstraction is a technical standard that needs to be embedded into the protocol to allow for native smart contract wallets. Bitcoin, on the other hand, is based on externally owned accounts, which are simpler and less versatile. The UX upgrades that smart contract wallets will bring to crypto will eliminate many of the complexities and unintuitive aspects of current wallets. Account abstraction is a game-changer that will make crypto wallets as seamless as popular fintech apps, but it is not yet available on Ethereum mainnet and requires an EIP to be implemented first. Layer 2 solutions like zk roll ups are already embracing account abstraction, and this is the future for everyday crypto users. The crypto community's skepticism towards new chains is a healthy response, as new chains need to prove their legitimacy through time and security.
Proving Legitimacy Through Bear Markets: Investors and projects must weather bear markets to prove legitimacy and filter out inexperienced or weak players. Expertise in other areas does not guarantee crypto understanding, so consider the source's background and experience.
In the world of cryptocurrencies, just as in biology, having a robust immune system is crucial for survival. Projects, like Bitcoin, and people, alike, must prove their legitimacy through the test of time, specifically by weathering bear markets. This earned legitimacy is vital as it filters out those who lack experience and resilience. Furthermore, not everyone's opinion on crypto is valuable, especially if they lack firsthand experience or knowledge about the crypto space. Expertise in other areas does not automatically grant understanding of cryptocurrencies. It's essential to be cautious and consider the source's background and experience before taking their opinions seriously.
A shift in perspective on Ethereum as a monetary asset: David, initially skeptical, challenges established views and develops the triple point asset thesis, viewing Ethereum as the world's greatest monetary asset. Bear market doesn't dampen bullish sentiment, new technologies seen as bullish despite price stagnation.
The ongoing development in the crypto space, particularly in Ethereum, is causing a significant shift in perspective among investors and experts. David, who was initially skeptical about the potential of Ethereum as a monetary asset, was motivated to challenge the perspective presented in a paper by reading it personally. He went on to develop the triple point asset thesis, which views Ethereum as the world's greatest monetary asset. This exchange highlights the dynamic nature of the crypto space, where new ideas and developments challenge established perspectives, and legitimacy is gained through proof and time. Moreover, the ongoing bear market has not dampened the bullish sentiment, as the building and innovation happening during "ship season" is seen as a reflection of the accelerating pace of development. The introduction of new technologies like Arbitrum's EVM equivalent and optimistic rollups is seen as bullish for the space, even if the prices do not yet reflect this. Overall, the crypto space is experiencing a period of rapid growth and change, and those who can stay open-minded and adapt to new developments are likely to reap the rewards.
Embracing the bear market signals of progress: The bear market brings clear signals and necessary pain for the next bull market, with potential rewards outweighing the risks. Remember, investing in crypto and DeFi carries risks, but the Bankless community can help you navigate the journey towards financial independence.
The speakers, Luke and Ryan, are enthusiastic about the current bear market because it provides clear signals of progress amidst the absence of noise. They believe that the pain and volatility experienced during this market condition are necessary steps towards embracing the next bull market. Additionally, they found humor in two memes that represent the crypto community's reactions to Ethereum and NFTs. The first meme portrays a person in jail, lamenting about staking ETH with Rocket Pool and receiving a lengthy prison sentence. The second meme depicts Bitcoiners discovering NFTs in a retirement home setting. Despite some negative sentiments towards NFTs, the speakers found joy in these memes and appreciated the lighter side of the crypto community. It's important to remember that crypto and DeFi investments carry risks, but the potential rewards make it an exciting frontier for those willing to take the journey. If you're interested in learning more about crypto investing and gaining financial independence, consider joining the Bankless community as a premium subscriber for exclusive content and access to their resources.
